Note. Acknowledgements

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2 Note The material contained in this publication may be freely quoted or reprinted but acknowledgement is requested, together with a reference to the document number. A copy of the publication containing the quotation or reprint should be sent to the UNCTAD Secretariat: Palais des Nations, 1211, Geneva 10, Switzerland. The designations employed and the presentation of the material do not imply the expression of any position whatsoever on the part of the United Nations Secretariat concerning the legal status of any country, territory, city area, or its authorities, or concerning the delimitations of its frontiers and boundaries, or regarding its economic system or degree of development. For further information on the UNCTAD MENA Programme please consult the following sites: and Or contact: julieta.coca@unctad.org This document has been reproduced without formal editing. Acknowledgements This publication was written by Philippe Brusick, UNCTAD MENA Programme Expert. The publication was organized and prepared for publishing under the supervision of Julieta Coca, Project Manager, UNCTAD MENA Programme, Division of International Trade in Goods and Services, and Commodities, UNCTAD. The formatting of this document was done by Rafe Dent, UNCTAD. Maria Bovey, UNCTAD, assisted with the English language version, the cover page design was created by Lirong Zang, UNCTAD and the Arabic translation was done by Ali Khaffane. Special thanks are owed to the Swedish Government, which has provided generous financial support to the UNCTAD MENA programme and enabled the production of this publication. Guillermo Valles Director Division of International Trade in Goods and Services, and Commodities 22 June 2016 UNCTAD/DITC/CLP/2016/4 United Nations Publication Copyright United Nations, 2016 All rights reserved ii

3 Executive summary This glossary of competition law and policy terminology in English-French and Arabic was prepared especially for the UNCTAD MENA Project countries in order to provide uniform definitions and specialized competition terminology. The principal aim is to promote exchanges of experience and enforcement practices, with a view to facilitating better understanding and gradual convergence of competition law and policies within the region. This glossary reviews the main competition related terms which are presented in alphabetical order. When feasible, general definitions are complemented with a review of the related competition law extracts for each of the MENA Project countries under review. iii

4 Abuse of Dominant Position/Power = Abus de position dominante Before defining the meaning of "abuse of dominance", it is necessary to refer to the definition of a "dominant enterprise" or firm. The generally accepted definition of dominance is that of an enterprise which is in a position to ignore the actions of its competitors. For example, if competitors lower their price, this will not force the dominant firm to respond by lowering its prices, because it will not lose significant market share as a result of price differential. More precise definitions are provided under "Dominant Position", within this Glossary. A dominant firm might take advantage of this situation to increase its position in the market. For this it might impose restraints on its suppliers to lower their prices or on its distributors or its clients to increase its resale price as a way to increase its profit margin. Some of these so-called vertical restraints include: a) resale price maintenance, b) tied-selling, c) full-line-forcing, d) differential pricing, e) exclusivity contracts, and f) refusal-to-deal, and are all aimed to "abuse" their dominant power or dominant position on the market. As can be seen below, all MENA Project countries which have a competition law at present prohibit abuse of dominance. Algeria Order No of 19 July 2003 Relating to Competition Article 7: The abuse of a dominant or monopolistic position is prohibited in a market or market segment aimed at: Limiting market access or the exercise of commercial activities; Limiting or controlling markets production, prospects or technical progress; Sharing markets or sources of supply; Hindering the price fixing by the free market by artificially encouraging price increases or reductions; Applying in respect of business partners dissimilar conditions to equivalent transactions thereby placing them at a competitive disadvantage in the competition; Concluding contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts. Egypt Law No.3 of 2005 on Protection of Competition and Prohibition of Monopolistic Practices + Amendments to Laws 190 /2008 and 193/2008 Article 8: A Person holding a dominant position in a relevant market is prohibited from carrying out any of the following: a) Undertaking an act that leads to the non-manufacturing, or nonproduction or the non-distribution of a product for a certain period of time; b) Refraining from entering into a sale or purchase transactions regarding a product with any Person or totally ceasing to deal with him/her in a manner that results in restricting that Person s freedom to access or exit the market at any time; c) Undertaking an act that limits distribution of a specific product, on the basis of geographic areas, distribution centers, clients, seasons or periods of time among Persons with vertical relationships; d) Imposing a condition, for the conclusion of a sale or purchase contract or agreement of a product, the acceptance of obligations or products unrelated by their very nature or by commercial custom to the original transaction or agreement; e) Discriminating in selling or purchasing prices or in terms of transaction between sellers or buyers whose contractual positions are similar; f) Refusing to produce or provide a product that is circumstantially scarce when its production or provision is economically possible; g) Dictating to Persons dealing with them not to permit a competing person to have access to their utilities or services, despite this being economically viable; h) Selling 4

5 Tunisia The Competition Law No.33 of Amendment to Law No. (18) of 2011 (*Adding paragraph H) Law No on Freedom of Prices and Competition Law No of on the Reorganization of the Competition and Prices products below their marginal cost or average variable cost; and i) Obliging a supplier not to deal with a competitor. Article 6: An Enterprise with a dominant position in the local market or a significant part thereof is prohibited from abusing this dominant position in order to prevent, limit or weaken competition including the following: a) Fixing or setting prices or conditions of resale of products or services; b) An activity or action which leads to setting barriers to entry of other Enterprises to the market, or their elimination from it, or their exposure to gross losses including selling at a loss; c) Discrimination between customers in similar contracts with regard to price of products or services or conditions of sale or purchase; d) Forcing any of its customers to refrain from dealing with a competing enterprise; e) Attempting to monopolize certain resources necessary for a competing enterprise to carry out its activities or to purchase a particular product or service to an extent that leads to increasing the price thereof on the market or preventing its decrease; f) Refusing without objective grounds, to deal with a particular customer under the usual commercial conditions; g) Tying the sale of a product or the provision of a service to the purchase of another or others or the purchase of a limited amount or a request for the provision of another service; and h)* Excessive pricing contrary to the grounds specified in the instructions issued by the Minister for this purpose. Article 7: The abuse by a company or group of companies is prohibited when the purpose or the effect of preventing, restricting or distorting competition: a) takes a dominant position in the domestic market or a substantial part it; b) creates a situation of economic dependence in which there is a customer or supplier that has no equivalent alternative. The abuse may consist in a refusal to sell, linked sales or discriminatory conditions of sale as well as the termination of commercial relations, or the sole reason is that the partner refuses to submit to unjustified commercial conditions. There may also be a direct or indirect imposition of a minimal feature to the resale price of a product or a good, the price of a service or a commercial margin. Chapter II: Competition and anti-competitive practices Article 5: Concerted or tacit actions, cartels and express agreements having an object or an anti-competitive effect shall be prohibited when they aim to: a) Hinder price fixing within the context of free play of supply and demand; b) Restrict access to the market to other companies or access the free exercise of competition; c) Limit or control production, markets, prospects or technical progress; and d) Share markets or sources of supply. Also prohibited is the abuse of a dominant position within the 5

6 internal market or in a substantial part of it, or of a state of economic dependence in which a client company or a supplier that has no alternative solutions for marketing, supply or provision of a service. The abuse of a dominant position or a state of economic dependence may consist particularly in refusal to sell or purchase, sales or procurement in the imposition of a minimum price for resale in the imposition of discriminatory conditions of sale and the severance of trade relations without a cause or the sole reason is that the partner refuses to submit to abusive commercial conditions. Any commitment, agreement or contractual clause relating to one of the practices is indisputably prohibited under paragraphs 1 and 2 of this article. Any quotation or practice of unfairly low prices could threaten the balance of economic activity and fair competition on the market is also prohibited. Abuse of Economic Dependence = Abus de dépendance économique Not all competition laws include the concept of Abuse of Economic Dependence. While US and EU Laws ignore this type of prohibition, also referred to as abuse of superior bargaining position, it is found mainly in French, Italian and German competition laws. Hence, the fact is that in the MENA Project countries below, only Algeria, and Tunisia have included this concept in their laws, but not Egypt, nor. Two different philosophies apply here: a) Those who only consider "competition" and "efficiency" of the relevant market; and b) Those who tend to regulate "fair" competition in business-to-business transactions. The latter protects the weaker firm from possible abuses by the stronger firm, for example, an agricultural supplier fully dependant on his distributor, even if the latter is not a dominant enterprise. Another example would be a retailer who is fully dependent on his supplier, although the latter is not a dominant firm. The North African provisions listed below define what is meant by "A state of economic dependency", in which a client or a supplier may find themselves, having no other equivalent business opportunity. The abuse may consist of a refusal to deal, tied-selling or discriminatory supply conditions, or in cancellation of established trade relations simply because the partner does not accept to submit to unjustified commercial obligations. Advocates of the "efficiency" principle would allege that competition law is aimed at ensuring efficiency, for the ultimate benefit of the consumer, and not aimed at protecting businesses, which in the process may ultimately weaken competition and efficiency. Algeria Order No of 19 July 2003 Relating to Competition Article 3: d) State of economic dependence: the commercial relationship in which one of the companies has no comparable alternative if it refuses to contract under the conditions imposed by another company, customer or supplier. Article 11: Prohibited when it may affect free competition; also when there is abuse by a company regarding the state of dependency within the context of a business client or provider relationship. Such abuse may consist in: A refusal to sell 6

7 Egypt Law No.3 of 2005 on Protection of Competition and Prohibition of Monopolistic Practices + Amendments to Laws The Competition Law No.33 of Amendment to Law Law No on Freedom of Prices and Competition without a legitimate reason; Concomitant sale or discriminatory; Conditional acquisition of a minimum quantity sale; Obligation to resell at a minimum price; Failure of a business relationship for the sole reason that the partner refuses to submit to unjustified commercial conditions; Any other act likely to reduce or eliminate the benefits of competition in a market. Only when abuse of dominant power is evident. Only when abuse of dominant power is evident. Article 7: The abuse by a company or group of companies shall be prohibited when the purpose or effect is to prevent, restrict or distort competition: a) of a dominant position in the domestic market or a substantial part it; b) a situation of economic dependence in which a customer or supplier has no equivalent alternative. The abuse may consist in a refusal to sell, linked sales or discriminatory conditions of sale as well as the termination of commercial relations, or the sole reason being that the partner refuses to submit to unjustified commercial conditions. There may also be a direct or indirect imposition of a minimal feature to the resale price of a product or a good, the price of a service or a commercial margin. Tunisia Law No of on the Reorganization of Competition and Prices Chapter II - Competition and Anti-competitive Practices - Article 5: Concerted or tacit actions, cartels and express agreements having an object or an anti-competitive effect are prohibited when they aim to: a) Hinder price fixing within the context of free play of supply and demand; b) Restrict access to the market to other companies or access the free exercise of competition; c) Limit or control production, markets, prospects or technical progress; and d) Share markets or sources of supply. Also prohibited is the abuse of a dominant position within the internal market or in a substantial part of it, or of a state of economic dependence in which a client company or a supplier that has no alternative solutions for the marketing, supply or provision of a service. The abuse of a dominant position or a state of economic dependence may consist particularly in refusal to sell or purchase, sales or procurement in the imposition of a minimum price for resale in the imposition of discriminatory 7

8 conditions of sale and the severance of trade relations without a cause or the sole reason being that the partner refuses to submit to abusive commercial conditions. Any commitment, agreement or contractual clause relating to one of the practices is indisputably prohibited under paragraphs 1 and 2 of this article. Any quotation or practice of unfair low prices could threaten the balance of economic activity and fair competition on the market is also prohibited. Appreciability Test = épreuve de-minimis (See De-Minimis Clause) For a case to fall within the jurisdiction of the European Competition rules (as opposed to National or member-state competition law) the activities under investigation must: (1) Have an appreciable impact on trade between the Member States of the European Union; and, (2) The activity under investigation must constitute an appreciable restriction on competition, i.e., it must have a genuine negative impact on the competitive environment within the EU (or EEA.) "Bait and Switch" Selling = Prix d appel A commonly found marketing technique consisting in attracting customers by offering exceptional discounts on a particular product "until stocks are exhausted", in which stocks may be limited and often the customer comes too late to benefit from the offer, but is then directed to buy more expensive substitutes. It is a form of "misleading advertisement" which is sometimes prohibited under provisions against Unfair Competition. Barriers to Entry = Obstacles ou barrières à l entrée au marché Barriers to entry may involve Governmental barriers, such as tariffs or quotas and strict licensing procedures or buy-local regulations. They may also be the result of particular market structures, like heavy sunk investment costs that cannot be recuperated, rigid consumer habits giving high preference for existing firms, or copyrights and patent rights foreclosing the market or making it difficult for new entrants. The presence or lack of significant barriers to entry is a key criteria considered in competition law, particularly in relation to merger review. If barriers to entry are low, competition authorities may regard it as unlikely that a party with a dominant position could abuse that position. Alternatively, if entry barriers are high, a merger may not be allowed, even when the result would be by simple concentration of the market, without necessarily creating a dominant position. The list below states all the MENA Project countries which have competition laws, prohibit limiting access to the market both through concerted action and abuse of dominance (Algeria, Egypt,, and Tunisia). Algeria Order N of 19 July 2003 on Competition Egypt Law No.3 of 2005 on Protection of Competition and Prohibition of Monopolistic Article 6: practices and concerted actions Article 7: abuse of a dominant or monopolistic position in a market or market segment aimed at: a) Limiting market access or the exercise of commercial activities; b) Limiting or controlling markets production, prospects or technical progress; Article 6: Agreements or contracts between competing persons in any relevant market shall be prohibited if they cause any of the following: ( ) (b) Dividing product markets or allocating them on grounds of geographic areas, distribution centers, type of customers, goods, market shares, seasons or 8

9 Tunisia Practices + Amendments to Laws 190/2008 and 193/2008 The Competition Law No.33 of Amendment to Law No.18 of 2011 Law No on Freedom of Prices and Competition Law No of on the Reorganization of the Competition and Prices periods of time. ( ) d) Restricting processes of manufacturing, production, distribution, or marketing of goods or services. This includes restricting product type or volume or limiting the availability thereof. Article 8: A Person holding a dominant position in a relevant market is prohibited from carrying out any of the following: ( ) b) Refraining to enter into sale or purchase transactions regarding a product with any Person or totally ceasing to deal with him/her in a manner that results in restricting that Person s freedom to access or exit the market at any given time; g) Dictating on Persons dealing with him/her not to permit a competing person to have access to their utilities or services, despite this being economically viable; Article 5: Anti-competitive Practices: a) Practices, alliances and agreements, explicit or implicit, that prejudice, contravene, limit or prevent competition, shall be prohibited, especially those whose subject or aim is to : 1) Fix the prices of products, services or conditions of sale, and the like; 2) Fix quantities of production or service provision; 3) Share the market on the basis of geographical regions or quantities of sales or purchases or customers or any other basis that negatively affect competition; and 4) Set barriers to the entry of enterprises into the market or eliminate them from it; ( ). Article 6: An Enterprise with a dominant position in the local market or a significant part thereof is prohibited from abusing this Dominant Position in order to prevent, limit or weaken competition including the following : a) ( ); b) An activity or action which leads to setting barriers to entry of other Enterprises to the market, or their elimination from it, or their exposure to gross losses including selling at a loss; Title III of Anticompetitive Practices Article 6: When the purpose is or may be to have the effect of preventing, restricting or distorting competition in the market, concert actions, agreements, explicit or implied coalitions in any form and for any reason whatsoever, it shall be prohibited especially when they tend to: a) limit access to the market or the free exercise of competition by other companies; b) limit or control production, markets, prospects or technical progress; and c) ( ). Chapter II - Competition and Anti-competitive Practices - Article 5: Concerted or tacit actions, cartels and express agreements having an object or an anti-competitive effect shall be prohibited when they aim to: a) ( ); b) Restrict access to the market to other companies or access 9

10 the free exercise of competition; c) Limit or control production, markets, prospects or technical progress; and d) share markets or sources of supply. Also prohibited is the abuse of a dominant position within the internal market or in a substantial part of it, or of a state of economic dependence in which a client company or a supplier that has no alternative solutions for the marketing, supply or provision of a service. The abuse of a dominant position or a state of economic dependence may consist particularly in refusal to sell or purchase, sales or procurement in the imposition of a minimum price for resale in the imposition of discriminatory conditions of sale and the severance of trade relations without a cause or because of a sole reason that the partner refuses to submit to abusive commercial conditions. Bid Rigging (Syn : Collusive Tendering) = Soumissions collusoires (syn : Trucage des offres) Bid-Rigging or Collusive Tendering is a manner in which conspiring competitors may effectively raise prices where business contracts are awarded by means of soliciting competitive bids. Essentially, it relates to a situation where competitors agree in advance who will win the bid and at what price, undermining the very purpose of inviting tenders which is to procure goods or services on the most favourable prices and conditions. Bid Rigging or Collusive tendering may take many forms. Competitors may agree to take turns on who will be the winning bidder. This practice is referred to as bid rotation. Some competitors may agree to submit unacceptable bids to cover up a bid-rigging scheme. In other cases, competitors may simply agree to refrain from bidding or withdraw a submitted bid. In addition to the bid submission or non-submission itself, a bid-rigging scheme must also have some way of compensating the apparent losers. Such agreements may involve sub-contracting parts of the main contract to the losing bidders in exchange, or making payments to the other members of the cartel. Bid-Rigging or Collusive Tendering is illegal in most countries. Even countries that do not have a competition law often have special legislation regarding tenders. Most countries treat Collusive Tendering more severely than other horizontal agreements, because of its fraudulent aspects and particularly its adverse effect on Government purchases and public spending. All MENA Project countries having Competition Law deal with the issue of public procurement. When the competition law does not specifically refer to public procurement, as in the case of Article 6 of Ordinance No of 19 July 2003, Amendment to Law of 25 June 2008 which has added a mention to that effect under Article 6. In Tunisia, Competition Law is supplemented by Decree no of 13 March 2014 regulating public procurement. In addition, public procurement is monitored by the National Observatory of Public Procurement - Observatoire National des Marchés Publics (ONMP). Countries which do not have Competition Law at present, deal with Public procurement under other specific regulations. Algeria Order N of 19 July 2003 on Competition + Law No of 25 June 2008 Amending and Modifying Order No.03- Article 6: When the purposes have the effect of preventing, restricting or distorting free competition in a market or in a substantial part of it, practices and concerted actions, conventions and express or tacit agreements or may have those particular effects are prohibited especially when they 10

11 03 of July 19, 2003 tend to: Limit market access or the exercise of commercial activities, Share markets or sources of supply; Impede pricing by market forces favouring artificial increases or decreases; ( ) Hinder price fixing by the free market by artificially encouraging price increases or reductions; ( ) * Enabling access to public markets to authors of those restrictive practices. Algeria Law No of 25 June 2008 Amending and Completing the Order No of July 19, 2003 Article 2:... (added...) The provisions of this Ordinance shall apply (...) to public markets, from the publication of the tender notice until the final award of the contract. (...) Article 5: The provisions of Article 6 (...) are complemented by a last dash (...) -are prohibited (...) allow the award of a public contract for the author of these restrictive practices. Egypt Law No.3 of 2005 on Protection of Competition and Prohibition of Monopolistic Practices + Amendments to Laws 190 /2008 and 193/2008 Competition Law No.33 of Amendment to Law No. (18) of 2011 Law No on Freedom of Prices and Competition + Law No of August 7, 2014 * Article 6: Agreements or contracts among competing Persons in any relevant market are prohibited if they cause any of the following: c) Coordinating with regard to proceeding or refraining from participating in tenders, auctions, negotiations and other calls for procurement; Article 5: Anti-competitive Practices A) Practices, alliances and agreements, explicit or implicit, that prejudice, contravene, limit or prevent competition, shall be prohibited, especially those whose subject or aim is : ( ) 5) Collusion in tender or bids, whether in overbidding or underbidding, but it shall not be considered collusive to submit joint offers in which the parties announce such joint offer "ab initio" (meaning from the beginning), and without the goal of such joint bidding as a means of preventing competition in any way. Title III Anticompetitive Practices Article 6: When the purpose is or may be to have the effect of preventing, restricting or distorting competition in the market, concerted actions, agreements, or explicit or implied coalitions in any form and for any reason whatsoever, shall be prohibited especially when they tend to: a) limit access to the market or the free exercise of competition by other companies; b) hinder the formation of prices by market forces by artificially favouring price increases or reductions; c) limit or control production, markets, prospects or technical progress; and d) share markets, supply sources or public markets. Tunisia Law No of on the Reorganization of Competition and Prices + Decree No of 13 March 2014 on Public Contracts Regulation Article 5: Concerted or tacit actions, cartels and express agreements having an object or an anti-competitive effect shall be prohibited when they aim to: 1) Hinder price fixing within the context of free play of supply and demand; 2) Restrict access to the market to other companies or access 11

12 the free exercise of competition; 3) Limit or control production, markets, prospects or technical progress; 4) Share markets or sources of supply. + (Decree No of 13 March 2014 on public contracts regulation) Chapter 2 Tender Procurement Article 7: The procurement is governed by the following principles: 1) Equality of candidates before the public order and equivalence of chances. 2) Transparency of the procedures. Use of competition. These principles are enshrined through compliance with the following rules: 1) Non-discrimination between applicants; 2) Independence of the public purchaser in accordance with Article 11 of this Decree; 3) Monitoring of clear and detailed procedures for conclusion of market steps and informing candidates of these procedures in time; 4) Generalization of responses of communication and explanation of the observations and clarifications by the candidates within a minimum of 10 days before the expiry of the deadline for receipt of tenders. (...). Bid Rotation = Rotation des offres Bid Rigging or Collusive Tendering may take many forms. One of these is referred to as bid rotation, whereby competitors agree to take turns on who will be the winning bidder. Block-booking = Réservation en bloc (See Full-Line-Forcing) A form of full-line-forcing, in which distributors are obliged to offer all the products of the manufacturer, and are not able to choose the winners and drop products that do not sell. Movie production studios required movie theatres and TV broadcasting companies to buy and show all their productions. Such block-booking was ruled to be illegal tying by US Supreme Court decisions in the 1940s and 1960s. Cartel = Entente Broadly, a cartel can be defined as an arrangement between competitors to limit the terms on which they compete with one another. The arrangement can be in the form of an explicit or tacit agreement or otherwise, in which competitors may among other things: a) Fix prices or other terms of sale or purchase, b) Collude in tenders (bid-rigging), c) Allocate markets or customers, d) Restrain production or sales, e) Collectively refuse to supply or to purchase, f) Collectively deny access to an arrangement, or association, which is crucial to competition, and g) Enter into any other types of horizontal agreements, such as joint marketing, joint purchasing, joint harmonization of standards, information-sharing and joint Research and Development (R&D). While the first six arrangements may be considered hard-core cartel arrangements and are prohibited outright, or per-se, in most competition legislations, the last one under no. 7, may be authorized as allowing certain advantages that may benefit consumers and society at large. 12

13 Algeria Order N of 19 July 2003 on Competition Egypt Law No.3 of 2005 on Protection of Competition and Prohibition of Monopolistic Practices + Amendments to Laws 190/2008 and 193/2008 Article 6: When the purpose is to have the effect of preventing, restricting or distorting free competition in a market or in a substantial part of it, practices and concerted actions, conventions and express or tacit agreements, or may have those particular effects, are prohibited especially when they aim to: Limit market access or the exercise of commercial activities; Limit or control production, markets, prospects or technical progress; Share markets or sources of supply; Impede pricing by market forces favouring artificial increases or decreases; Apply in respect of business partners dissimilar conditions to equivalent transactions thereby placing them at a competitive disadvantage in the competition; Making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts. Article 6: Agreements or contracts among competing persons in any relevant market are prohibited if they cause any of the following: a) Increasing, decreasing or price fixing of sale or purchase of products ( ): b) Dividing product markets or allocating them on the grounds of geographical areas, distribution centers, types of customers, goods, market shares, or seasons/ periods of time; c) coordinating with regard to proceeding or refraining from participating in tenders, auctions, negotiations and other calls for procurement; and d) Restricting processes of manufacturing, production, distribution, or marketing of goods or services. This includes restricting product type, volume or limiting the availability thereof. Competition Law No.33 of Amendment to Law No. (18) of 2011 Law No on Freedom of Prices and Competition + Law No of August 7, 2014 * Article 5: Anti-competitive Practices a) Practices, alliances and agreements, explicit or implicit, that prejudice, contravene, limit or prevent competition, shall be prohibited, especially those whose subject or aim is to: 1) Fix the prices of products, services or conditions of sale, and the like; 2) Fix quantities of production or service provision; 3) Share the market on the basis of geographical regions, quantities of sales, purchases, customers, or any other basis that negatively affects competition; 4) Set barriers to entry of enterprises into the market or eliminate them from it; and 5) Collusion in tender or bids, whether in overbidding or underbidding, but it shall not be considered collusive to submit joint offers in which the parties announce such joint offer "ab initio", and without the goal of such joint bidding being to prevent competition in any way. B) see de minimis exemption Title III Of anticompetitive practices Article 6: When the purpose is or may be to have the effect of preventing, restricting or distorting competition in the market, concerted actions, agreements, explicit or implied coalitions in any form and for any reason whatsoever, shall be prohibited especially when they tend to: 1) limit access to the market or the free exercise of competition by other companies; 13

14 2) hinder the formation of prices by market forces by artificially favouring price increases or reductions; 3) limit or control production, markets, prospects or technical progress; and 4) share markets, supply sources or public procurement. Tunisia Law No of on the Reorganization of the Competition and Prices Article 5: Tacit or concerted actions, cartels and express agreements having an anti-competitive object or effect shall be prohibited when they aim to: 1. Hinder price fixing in the context of free play of supply and demand; 2. Restrict access to the market to companies - other or access the free exercise of competition; 3. Limit or control production markets, prospects or technical progress; and 4. Share markets or sources of supply. Class Action = Recours collectif A growing number of competition laws give the possibility for numerous consumers or customers who have suffered from a specific violation of competition law (a "class" of customers) to take collective action for damages in a single case. At present, Competition Laws of the MENA Project countries do not mention such possibilities of collective action for damages. Collusion = Collusion Collusion is the coordination of competitive behaviour among competitors such as raising prices, limiting production, and/or allocating markets with a view to increasing their profits. Enterprises participating in a cartel collude among themselves. Such collusion does not need to be specified in a written agreement, as tacit collusion may often be the result of parallel action by enterprises who do not actually talk to eachother, but who will implicitly follow the other firm s behaviour (i.e. If you do not enter my market, I will not enter yours ). Collusive Tendering = Soumissions collusoires (See Bid-Rigging) Comity Principle = Principe de Courtoisie The Comity Principle is applied in international co-operation in the field of competition. Under the so-called Negative Comity (Courtoisie négative), any country party to a cooperation agreement in the field of competition is expected to take into account important interests of other countries, in its application of competition law, in order not to harm such important interests. Under the so-called Positive Comity (= Courtoisie positive), any country may request another country to apply its competition laws against a violation of such laws which has an effect on the territory of both countries. Concerted Practice = Action concertée Enterprises act in concert with or without a formal agreement to coordinate their activities. One example of concerted practice is Parallel Pricing, i.e, when the one increases its prices, the other follows Concerted Refusal to deal; syn: Group Boycott = Refus de vente (ou d achat) concerté Concerted refusals to purchase or to supply, or sometimes described as group boycotts, are agreements between competing firms where they collude with a view to stopping or limiting their sales to particular 14

15 customers or alternatively stopping or limiting their purchases from particular suppliers. Group boycotts may be used to implement an illegal anti-competitive behaviour. For instance, in order to enforce price fixing agreements, competing firms may agree not to do business with others except upon agreed terms. In other instances, group boycotts can be employed to prevent a firm from entering a market or to disadvantage an existing competitor. Or they may target price discounters in order to enforce resale price maintenance arrangements. Sometimes, the boycott may not actually be put into effect, but the threat to do so may induce the potential victim(s) to take the proper course of action prescribed. Group boycotts may be either horizontal (i.e. competing firms may agree among themselves not to sell to or buy from targeted businesses or individuals) or vertical (involving agreements between parties at different levels of the production or distribution chain, refusing to deal with a third party, normally a competitor to the firms involved in the agreement). Group boycotts are considered illegal in a number of countries, particularly when they are designed to enforce other arrangements or when they restrict competition, and lacking a business justification. Accordingly, concerted refusals to supply or purchase are often regarded as per se offences in a number of countries. Algeria Egypt Order N of 19 July 2003 on Competition Law No.3 of 2005 on Protection of Competition and Prohibition of Monopolistic Practices + Amendments to Laws 190/2008 and 193/2008 The Competition Law No.33 of Amendment to Law No.18 of 2011 Article 6: When the purposeis to have the effect of preventing, restricting or distorting free competition in a market or in a substantial part of it, practices and concerted actions, conventions and express or tacit agreements or may have those particular effects shall be prohibited especially when they tend to: Limit market access or the exercise of commercial activities; Limit or control markets production, prospects or technical progress; Share markets or sources of supply; Hinder price fixing by the free market by artificially encouraging price increases or reductions; Apply in respect of business partners dissimilar conditions to equivalent transactions thereby placing them at a competitive disadvantage in the competition; Make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts. Article 6: Agreements or contracts among competing persons in any relevant market are prohibited if they cause ( ) (d) Restricting processes of manufacturing, production, distribution, or marketing of goods or services. This includes restricting product type, volume or limiting the availability thereof. Article 5: Anti-competitive Practices A) Practices, alliances and agreements, explicit or implicit, that prejudice, contravene, limit or prevent competition, shall be prohibited, especially those whose subject or aim is to : 1) Fix the prices of products, services or conditions of sale, and the like; 2) Fix quantities of production or service provision; 3) Share the market on the basis of geographical regions, quantities of sales, purchases, customers, or any other basis that negatively affect competition; and 4) Set barriers to entry of enterprises into the market or 15

16 Law No on Freedom of Pprices and Competition eliminate them from it; ( ). Title III - Anticompetitive Practices - Article 6: When the purpose is or may be to have the effect of preventing, restricting or distorting competition in the market, concerted actions, agreements, or explicit or implied coalitions in any form and for any reason whatsoever, shall be prohibited especially when they tend to: 1) Limit access to the market or the free exercise of competition by other companies; 2) ( ); 3) Limit or control production, markets, prospects or technical progress; and 4) share markets, supply sources or public procurement. Tunisia Law No of on the Reorganization of the Competition and Prices Article 5: Concerted or tacit actions, cartels and express agreements having an object or an anti-competitive effect shall be prohibited when they aim to: 1) Hinder price fixing within the context of free play of supply and demand; 2) Restrict access to the market to other companies or access the free exercise of competition; 3) Limit or control production, markets, prospects or technical progress; and 4) Share markets or sources of supply. Confidentiality Obligations = Obligations de confidentialité Employees of competition authorities are obliged to maintain strict confidentiality, especially when their activities give them access to details of cases under deliberation. The European Union, as well as national competition authorities, has adopted specific rules to this effect. See in particular DG Comp s Code of Ethics and Integrity. France s Competition Authority also has its own Code de déontologie for all employees and commissioners. All the competition laws of MENA Project countries provide for confidentiality obligations of their employees and members. In addition, business secrets are specifically excluded from disclosure in Algeria and. In Egypt, similarly as obligations contained in the EU DG Comp Code of Ethics and Integrity, Employees of the Authority are prohibited to work with Persons that were subject to examination or are in the process of examination for a period of two years from the end of their employment. Algeria Order N of 19 July 2003 on Competition Article 29: (...) The members of the Competition Council are bound by professional secrecy. Article 30: For cases for which are referred to, the Competition Council hears conflicting interested parties who must submit a brief. (...) The interested parties and the representative of the Minister of Commerce are entitled access to files and can obtain a copy. However, the President can refuse an initiative or at the request of interested parties, the communications or documents involving trade secrets. In this case, sections or documents are removed from the file. The decision of the Competition Council may not be based on the papers or documents removed from the file. 16

17 Egypt Law No.3 of 2005 on Protection of Competition and Prohibition of Monopolistic Practices + Amendments to Laws 190/2008 and 193/ Amendments The Competition Law No.33 of Amendment to Law No.18 of 2011 Law No on Freedom of Prices and Competition + Law No of August 7, 2014 * Article 16: The employees of the Authority are prohibited from disclosing any information, data or the sources thereof, in relation to cases falling under the scope of this law which are submitted or circulated during review, taking actions and issuing decisions in such cases.* Such information and data, as well as their sources, shall not be used for any purposes other than those for which they were submitted. Employees of the Authority are prohibited to work with Persons that were subject to examination or are in the process of examination on, for a period of two years from the end of their employment. *2014 Amendments to the Law have extended the confidentiality obligation upon ECA officials to Board Members and adopted harsher sanctions for the breaching of confidentiality obligations (Fines from 50'000 to 500'000 EGP or approx. 6'500 to 65'000 USD). Article 13: (A ) (B) Officers of the Directorate and any person looking into its activities shall be required to maintain professional secrecy. Article 23: Any person who discloses any confidential information that they received from any source, except if that was according to a court order, shall be punishable by a fine of not less than 1000 ian Dinar and not exceeding 10'000 JD (Approx. 14'100 USD). Title III - Economic Concentrations - Article 21: When questioning other third parties about the operation, concerning its effects and the commitments proposed by the parties, a decision will be made public on the conditions laid down by regulation, the Competition Council and administration will take into account the legitimate interest of the parties when proceeding to notify natural or legal persons mentioned, that their business secrets should not be divulged. Article 11 * The Board members are bound to secrecy of deliberations and meetings. Tunisia Law No of on the Reorganization of the Competition and Prices Article 13: The Competition Council (...) Before exercising their duties, Board Members takes the following oath: "I swear by God to faithfully perform my duties, to maintain neutrality and not to disclose the secrecy of deliberations." The oath is taken before the full Council Meeting, the minutes of which are recorded. (...) Article 70: Officials, agents and other persons who know of infringement cases are bound to secrecy and the provisions of Article 254 of the Criminal Code will apply to them. 17

18 Conscious Parallelism = Parallélisme des prix Refers to a market situation where competitors offer closely comparable prices and terms. Conscious parallelism concerns similar products priced very closely, although not identically. Although not automatically illegal, conscious parallelism may be regarded as highly suspicious by competition authorities, especially when price variations, in particular price increases, are automatically matched by competitors. The existence of such parallelism, like parallel pricing, may be considered as a strong indicator of the existence of a cartel. Cover-up Bids = Soumissions truquées Some competitors may agree to submit unacceptable bids to cover up a bid-rigging scheme. These are called "cover-up bids or tenders". Damages = Dommages et intérêts Many competition laws provide for claims regarding damages by those who have suffered injury from an infringement to the competition law. For example, those who have had to pay higher prices as a result of cartel violations, have the possibility to claim for damages, as restitution of the amounts for which they have been spoliated. In the United States, for example, once the public case has resulted in a condemnation of members of a cartel, antitrust laws allow for civil courts to claim for treble damages (three times the amount effectively lost to a cartel) for those who have suffered damages. The trebledamages are in the way of an incentive for private individuals to denounce cartels and to gain from prosecution. In MENA Project countries, the law provides for damage claims only in Algeria and. In Tunisia, damages are provided in cases where the Minister can negotiate a settlement, but this article excludes the possibility of settlements for anti-competitive practices and for concentrations (Articles 5,7,8,9,10). In the other countries having competition law, provisions for damage claims have not been found. Algeria Order N of 19 July 2003 on Competition Article 48 - Any natural or legal person, who is aggrieved by a restrictive practice as provided for herein, may refer to the competent court for reparation in accordance with the law in force. Egypt Law No.3 of 2005 on Protection of Competition and Prohibition of Monopolistic Practices + Amendment Laws The Competition Law No.33 of Amendment to Law No.18 of 2011 Law No on Freedom of Prices and Competition Not Found Article 16: ( ) C- The Court s jurisdiction under this Article shall include claims for damages arising out of these violations. ( ) Not Found Tunisia Law No of on the Reorganization of Article 73: With the exception of breaches of the provisions of Articles 5, 7, 8, 9, 10 and 69 of this law and upon request of the 18

19 Competition and Prices offender, the Minister of Trade may, before the commitment to public action, or a court hearing the case, authorize the conclusion of a transaction, as long as a final judgment has not yet been pronounced. (...) The amount of the transaction does not release the offender from the obligations under the law or their liability on any damage or from the damage caused to others because of the offense. (...) Dawn Raid = Perquisition Dawn raids are surprise inspections of company sites aiming at finding evidence of breach of competition rules, often done simultaneously in different premises belonging to a company under investigation. Dawn raids are usually conducted in the early morning, at the opening of working hours. In order to be successful, such dawn raids must be well prepared and kept secret to avoid any chances of documents being concealed or erased from computers. All competition laws of MENA Project countries provide for dawn raids, specifying the timing of such interventions. Only Algerian Law is not fully clear on the subject of dawn raids. Algeria Order N of 19 July 2003 on Competition Article 51: The rapporteurs may, without requiring professional secrecy, seek all documents necessary for the investigation of the case for which they are responsible. They can demand to obtain those files where ever they are, seize them, to facilitate the accomplishment of their mission. (...) The rapporteur can gather all the information necessary for its investigation with companies or with any other person. (...). Egypt 2014 Amendments Endowing ECA with more enforcement powers (dawn raids and interim measures) The Competition Law No.33 of Amendment to Law No (18) of 2011 Law No on Freedom of Prices and Competition Article 19: A) The Director may commission in writing any of the Directorate s officers who have been delegated by the Minister to conduct the following: 1) Enter, during working hours, into commercial establishments, offices and stores, to conduct the necessary inspections and searches; and 2) View documents, records and files, including computer files, and seize all that is necessary thereof or copies of originals in return for a notice of receipt, provided that all seized materials be referred to in the transcript, and be returned after the end of the review thereof. ( ) B) The officers must identify themselves and show the concerned party a copy of their written authorization. Title VII - Investigations and Sanctions - Article 72: Investigators can operate in all premises and they can seize documents, as part of investigations requested by the President of the Competition Council or by the administration on motivated authorization of the King s prosecutor (...). The visit, which cannot begin before 6 am or after 9 pm take place in the presence of the occupier or their representative. Otherwise, the provisions of Article 103 of Law No on criminal procedure are applied. 19